2022 Schedule OR-FIA-40-N Instructions
Page 1 of 1, 150-101-161-1       Oregon Department of Revenue
(Rev. 08-23-22)

Oregon Farm Income Averaging for Nonresidents

General information                                               OR-FIA-40-N, line 2. This is the amount from a farming busi-
                                                                  ness on federal Schedule J, line 2a, if you elect to use farm 
Purpose. You may elect to figure your 2022 tax by averaging,      income averaging for federal tax purposes. Don’t enter more 
over the previous three years (base years), all or part of your   than the amount on Schedule OR-FIA-40-N, line 1. While 
2022 taxable farm income.                                         federal law allows averaging of fishing business income, Oregon 
Use Schedule OR-FIA-40-N to calculate your average Oregon         law doesn’t. Don’t include fishing business income on Schedule 
farm income, if you are a nonresident.                            OR-FIA-40-N, line 2.
You will need copies of your original or amended Oregon           To figure elected farm income, first figure your taxable 
income tax returns for tax years 2019, 2020, and 2021 to fig-     income from farming. Taxable income from farming includes 
ure your tax on Schedule OR-FIA-40-N. If your return was          all income, gains, losses, and deductions attributable to any 
adjusted, use the taxable income and tax from the adjustment.     farming business. Gains and losses from the sale or other 
You can obtain copies of prior years’ returns for a small fee     disposition of property (other than land) must be from prop-
by going to  www.oregon.gov/dor and logging in to Revenue         erty regularly used for a substantial period of time in your 
Online, or by requesting copies by mail. You can also request     farming business. However, it doesn’t include gain from the 
a return transcript for free by sending a message in Revenue      sale or other disposition of land. Oregon source farm income 
Online or by calling us directly. You will also need tax instruc- includes income or loss received from an Oregon farm while 
tion booklets for those years, along with Schedule OR-FIA-        you were a nonresident and farm income or loss received 
COMP and instructions which you can download from our             during any portion of the year you were an Oregon resident.
website, or you can contact us to request them.                   You don’t have to include all of your taxable income from 
Farm income averaging can’t be used with the qualified            farming on Schedule OR-FIA-40-N, line 2.
business income reduced tax rate under Oregon Revised             Your elected farm income can’t exceed your Oregon tax-
Statute (ORS) 316.043.                                            able income. Also, the portion of your elected farm income 
                                                                  treated as a net capital gain can’t exceed the smaller of your 
Farming business                                                  total net capital gain or your net capital gain attributable to 
A farming business is the trade or business of cultivating        your farming business.
land or raising or harvesting any agricultural or horticultural   If your elected farm income includes net capital gain, you 
commodity. This includes:                                         must allocate an equal portion of the net capital gain to each 
• Operating a nursery or sod farm.                                of the base years.
• Raising or harvesting trees bearing fruits, nuts, or other      If you had a capital loss, for any base year, that resulted in a 
crops.                                                            capital loss carryover to the next tax year, don’t reduce the 
• Raising ornamental trees (but not evergreen trees that are      elected farm income allocated to that base year by any part 
more than six years old when severed from the roots).             of the carryover.
• Raising, shearing, feeding, caring for, training, and manag-
ing animals.                                                      Forms and additional resources
• Leasing land to a tenant engaged in a farming business, 
but only if the lease payments are based on a share of the        Visit our website at  www.oregon.gov/dor/forms, to 
tenant’s farm production (not a fixed amount).                    download:
• Wages and other compensation you received as a share-           • Current forms, instructions, and publications.
holder in an S corporation engaged in a farming business.         • Prior year forms and instructions.
A farming business doesn’t include:                               Access Oregon tax forms and instructions on our website 
• Contract harvesting of an agricultural or horticultural         anytime, or contact us to order them.
commodity grown or raised by someone else; or
• Merely buying or reselling plants or animals grown or           Do you have questions or need help?
raised by someone else.
                                                                    www.oregon.gov/dor
                                                                  503-378-4988 or 800-356-4222
Elected farm income                                               questions.dor@dor.oregon.gov
Your elected farm income is the amount of your taxable            Contact us for ADA accommodations or assistance in other 
income from farming that you elect to include on Schedule         languages.